three years so yeah. i always worry about what the masses think. whether or not it happens or not the fact that it's a headline, the fact that larry kudlow sat right here and discussed the possibility of going into a recession for the united states i think it makes everyone think about it again. >> all right. steve, thanks for stopping by. we appreciate it. >> merry christmas. >> merry christmas to you. and we sit here with the s&p 500 at 1425.5 down by 1.25 off session lows but this is going to be an interesting one to watch as we head into the session because we had those remarks from speaker boehner earlier and now we're taking a little leg lower. >> and shortened session on monday as well. >> that's it for "squawk on the street." let's hand it over to headquarters and the fast half. >> guys, thanks very much. welcome to the halftime show. four hours to go until the close. here's where we stand on wall street. off the lows of the day by not by that much though. the dow is still down almost

160. the s&p and nasdaq are selling off at this hour. here is what we're following on halftime. stock in motion. rim shares sink as the company surprises the street. what's next for the beaten up blackberry maker? the najarian brothers debate it. saving face. invest og bill gurley on facebook's comeback streak and the one social media stock to watch in 2013. but first our top story, cliff diving. no deal in d.c. sends stocks over the edge today. what is the next move in the negotiations and how can you best protect your money? we're trading the market for the next hour with pete and john najarian, joe, and steven weis. pete, give us where you are in the market here given dire straits in d.c.? >> no doubt about it we've been talking about this for weeks. we are always reacting to whatever the politicians are giving us. one day it's positive the next day negative. obviously this news from last night certainly hit the markets. we had a pretty nice rebound early in the session but now here we are pushing back toward the lows of the day. that volatility index continues

to extend to the upside, the financials are getting hit pretty hard. however, they did show a little resilience as well. so i would actually look into the latter part of the day although you just wonder are we going to have enough volumes that are readable volumes into the final three hours of the session given what's going on now? but it is still -- this is all about the politicians, all about the fiscal cliff. >> steven weis, what do you do if the politicians can't rise above and solve this thing? what are the traders to do? >> first of all, who knew the mayans had it right, were day traders? >> i knew. >> the edge of the world for the day traders. i think most of the damage to going over the fiscal cliff which now looks increasingly likely is going to be done before we actually go over it. so as i've been cautioning up to this moment, as the markets traded higher, the risk got ratcheted up. what do you do now? i basically don't think you do anything. when you go through negotiation it gets toughest as you get to the end of it and the market is still going to look good and the back half of next year may be sooner so stay where you are.

use the opportunity if you're not in, start nibbling away at high quality companies. >> joe, we're down big. okay? we could have been down bigger. the market is still relatively speaking holding in there. we're down 150 points. in the big context of things sitting over 13,000 not like a tremendous drop. the s&p is over 1425. we're sitting right there. what do you make of that? >> the big washout was last night between 8:15 and e8 20 the dow futures basically went down to 304 at one point, the s&p futures 1391.25. i think this is pure math right now. and i think if you have the expectation in 2013 that the fiscal drag will be 550 billion then you get out of the market place. i don't see that happening. i still see that we're going to shave off half of that. it's going to come in somewhere around $250 billion. i think we're going to be able to protect the lower income below 250. i think the amt will be protected as well so i think what you do right now is you wait for the calendar to flip

into 2013. you're going to get some strong institutional fund flows at that point and follow along there accordingly. for now you enjoy the holidays. don't sell. >> doc, what is the best way to navigate this handful of trading days that remain in 2012? >> well, i think the way david tepper talked to cnbc about how he navigated it. when he sees low ebs in volatility that's when he is nervous. and you saw that at the end of november. you saw a volatility, vix reading of about 15. today it almost hit 20. it hit 1990 on the highs today. so that is a 32% move basically from the end of november just through today. so what would tepper have been doing if he followed the same pattern that he claims that, and i'm not just saying he claims, so sorry, david, but that he said he did? that is i think he sold at those times and now he is probably looking to buy. in other words the volatility is up 32%. the market does favor you buying when the market makes that big surge in fear. this is what we've been looking

for. so to the end of the year, i will be surprised if we get much over a 22 reading here. >> let's bring in our senior economics reporter steve liesman with more. you've been out front. >> hold on. congratulations. it took you all year. you finally whipped these guys into shape. what an incredibly coherent -- they got it right. i don't have anything to add. it took all year but you got it. congratulations to you. it's fantastic. >> thank you very much. >> you've been ahead of the reporting on this story. what happens now? >> here's what i have. what i think is an assessment, a little more detailed. these guys essentially gave it. here's where we are, where i think we are. let's look at the situation. we come back to them, if that changes the trade at all. >> all right. >> the house apparently cannot pass any tax hikes with a majority of the majority. in other words they need the dems. two, the president now seems to me only aiming to extend tax cuts for those with incomes below 250. three, the senate can probably adopt this tax cut extension.

i think joe was talking about that. okay. now on to four. the house can pass this extension but it is going to need democratic support. all that sounds good. here are the two bad parts. no obvious root that i can foresee politically to avoid the sques taern, two, no obvious root for spending cut agreements. you're not going to get any of that stuff. before you have a chance to comment i want to show you, here's the math of the next congress. you go 241 gop with 55 tea party plus or minus with 191 it doesn't get any better. the math or the concept of your' still going to need dems to join with the house remains the same. so there is no reason to play for time in the next congress from what i assess. >> so if we extend the middle class tax cuts and then push everything off and work on that later, you guys tell me, tell steve what that means for you. >> let me just source steve's knowledge here and then is the concern for all of us the extension of the debt limit as we flip the calendar into 2013. >> that may be what happens. it all gets rolled into one.

you end up having a tax cut, spending cut, debt ceiling debate all together in the same pot which is a lot messier than i think anybody wanted to handle it. i think that is the other aspect of this, guys, when you think about it. my sources suggest to me that nobody expected to be here. nobody wants to be here. i don't think boehner wants to be here. i think the president thought earlier this week he was going to be involved in a back and forth. a little bit of haggling. hunt a million, 400, 750, 500. whatever it was that it was going to go that way. i think boehner thought he'd have his plan b pass and go to the president with a stronger hand. so i don't, there is a bit of it going on over on the democratic side right now but i think it is limited by the idea if we go over it is going to hurt the president too. >> meantime folks watching the show, investors at home, traders, wherever they are, they're caught in the middle. i mean, i don't know what they'll make of all this. >> that was my question, scott. okay. there are short-term trades but should i hang loose and then

come in when the market really does pop off? and is that a buying opportunity? i know some people stug is. >> i think most people hate to lose money. that is the first thing, preservation of capital. i don't think you buy right now. i think you get ready to buy and there are high quality names that won't be affected. one area you have to do though is retail so the consumer confidence numbers these headlines could not come at a worse time. >> spending numbers were good. >> absolutely. >> surveys, you know, not worth anything. >> i maintain that. we follow it but don't trade on it. >> i think when you see these headlines when they really don't know what the economics are, as they're going out to shop, that $150 gift becomes a hundred dollar gift. let me address one more thing talking about tepper. so -- >> good friend of yours. >> night before last, last night a little poker. on a plane now. >> here's the deal.

>> you play poker with tepper? >> not after last night. >> youette went through your entire social schedule. >> i got a hair cut two days before. >> thanks a lot. >> in terms of what he is thinking, what others are thinking, they're surprised steve says nobody thought it would get to this point. nobody thought that you'd come up to a vote and boehner didn't have the votes. he told me don't ask a question unless you know the answer. that was the most damaging -- >> 1413 was last friday's close right in the s&p 500? so we're still well above that right now. if we don't break through that then, yes, you buy this dip in my opinion. >> let's touch one more important part of the market while steve is here. financials. right? >> we thought they were going to have a deal. >> have consistently run up. i think the best performing sector at large this year. what do you do now?

>> first of all on the first trading day of this year i sat with this gentleman and he told you to go buy financials. great job. i am long goldman sachs, long morgan stanley. i have not sold any of that. why? i believe there is a plan c behind plan b. plan c is coming. >> is that code for buy citi? >> plan c we've already talked about here and it shaves $250 billion off the potential fiscal drag that the market is fearing. that is why you don't sell here. do you buy right now today on december 21st? no you don't because you don't have the institutional fund flows to get behind you like you're going to have on the other side of january. that's your time to buy the first week of january. that is when the strong flow is going to come in and the financials to answer your question is the first place to go. >> doc, what do you do with financials now? if you liked them yesterday, if you liked them the day before, you still think we're going to eventually come to some kind of an agreement, aren't the fundamentals still in place for financial stocks to continue to rise? housing continues to improve. you have a fairly, you know, the yield curve.

>> that is the single biggest thing although we have seen the fall off, pretty dramatic, in confidence, whether small businesses, and this is all related back to these cliff negotiations and it's also why we got our debt downgraded in 2011 because people watched this ugliness that is washington, d.c. and sausage being made. however, i was looking for the washingtonouts, judge. so i continue to believe that we saw that in those metals yesterday. you look at slv, you look at the gld. gld is nearly two points higher than where the washout occurred yesterday. >> was it silver that was down 4% yesterday or was that the day before? >> silver and gold both. and yesterday you had the flush like i say i'm looking at a gld right now at 160.23 traded down nearly two points lower yesterday. >> do you guys think there is a moment where a downgrade could also present an opportunity. >> sure. >> to re-evaluate, i don't know if it's a buying opportunity but there was very little effect last time but i know they're starting to worry.

geithner said as much that what really they're going to jump on to is the political dysfunction not that we can't pay our bills but we can't agree to pass legislation to pay our bills. >> i agree. let me wrap it up. we're talking fundamentals of financials and the market. fundamentals of the economy are improving. >> they're not bad. we've had a little pop like the philly fed which came back, which on the sandy spending told us there was a sandy negative earlier in the earlier day so definitely a pop. we had the pop in the durables this morning, personal income and spending data. the consumers hung in there. the golden ring is out there to be grabbed if the politicians would get off the carousel, you know? if they would stop trying to run the thing. if they could pass this deal, put the spending cuts in place, that are agreed to, you need people to want peace. i'm not sure that is what they want. >> they look more like a bunch of guys trying to get out of a

little tiny car all at once than riding around a carousel. they look like clowns. >> they do. >> guys, enjoy being with you. >> thank you, steve. >> one of the best things i do here is hanging with you guys. >> mutual. see you on the other side. all right. coming up on halftime the rally in r.i.m. comes to a screeching halt. buy on the dip or steer clear? the najarian brothers with two different opinions are getting ready to rumble. which ponytail is going to emerge as the winner? and one of the premier venture capitalists in silicon valley bill gurley reveals to us and you the social media stock to own in 2013. lots more "halftime report" is on the way. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends

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time for our top three trades and today focusing on some of the biggest earnings movers. first up shares of nike popping after the company easily beat second quarter earnings estimates. pete, stocks up nearly 5%. if there was something to hang on here china wasn't exactly going gang bust eers for nike. >> no but apparel sales were up and a lot of that has to do with the affiliation they're part now of the nfl. they're talking about some innovations going into other sports, the men's sports apparel. that is huge for nike right now. at these levels you could actually wait for the simmering,

the little overflow to the upside to pull back under a hundred but i like the stock a lot and i think when they talk about their margins they talked about the fact that they've seen some compression but actually see the whole year very flat. >> red hat is also higher on better than expected numbers. the software provider seeing strong growth in its subscription business. doc, let's look at 3.75% today. >> i imagine if we didn't have the drag of the market against it, scott, when you look at this one they had 25 deals up for renewal. all of them renewed at 120% of the previous price they were willing to pay. in other words this is demand and that's big. gross margins 86%. subscription revenue was up 19% year over year. they're doing just about everything right and like i say if we didn't have a down 180 day in the dow i think this one would be up more like $5. let's see how it goes next week. >> finally walgreens shares dropping after missing estimates falling short of revenues as well. weis, what do you see here? 4% decline for walgreens? >> what we need to really make this stock work is a great flu

season. we need lots of people sick. here's what i say. i like cbs a lot better because cvs in terms of the new way we're looking at health care with mail order prescriptions and managed care, that is the way to play it because they operate both fronts. i think it's a better run company. i go to cvs. i wouldn't come to walgreens. >> buzz kill written all over you today or what? >> joe is doing his part. >> the mayans. >> i am on therma flu and it took me five different cvs trips to find one. >> thank goodness for laroche and genentech. >> from facebook to linked in social media stocks have been the talk of wall street this year. what is in store for 2013 and which companies are ready for a big breakout? bill gurley of benchmark joins us live from palo alto, california. nice to see you back on the show. >> thanks for having me. >> all right. let's go first facebook. pretty remarkable comeback i'd

say since those dreaded days of the ipo. i think you'd admit that. where does facebook go next? >> well, i think, you know, the obvious question everyone asks on your show and others is the mobile monetization going to come through and i think they're making progress on that front. i also think they'll be able to monetize identity going forward. i look at the gift program which i am quite bullish on as kind of their first attempt in that direction but i think you'll see many other products like that going forward. i've also heard from the -- our companies that are using facebook as an ad product that they're retargeting product which is a rather new product is actually starting to work really well. >> i know you are not exactly a stock picker in your former days you were obviously an analyst. i mean, when you look at facebook as well as you know the company, given the trajectory that it appears to be on after those dark days of the ipo, is this a stock that we're going to be talking about next year as eclipsing where it came out to

wall street? do you foresee that kind of thing happening in the near future? >> i don't know if it is going to get to that level. i do think that a lot of the late stage private market was perturbed by the bubble that was happening out here in the private markets and i think that led to a price that was, you know, extremely high. i do think that if you look back to the summer, a lot of the big institutions were underweighted in facebook, worried about the lockup releases, and they've had to move in and, you know, this is a company you have to own if you're a large tech fund. it is a preeminent player in the space. it has a global network effect. and i do think it'll be a stock that we all talk about next year for sure. >> but i want to be clear here. you're telling us the stock that sits right now at 26 bucks in your words is not going to get back to 38. the way you speak about it from a large institutional ownership standpoint you wouldn't say to the little guy on the street, watching you right now, that facebook is a buy. is that what i'm hearing? >> no.

i think it's quite possible that it could get to that level. i don't know if it is going to get to that level next year. i think if i look out two or three years and say can this stock, you know, deliver a buck 50 or two bucks in earnings i think that is very possible in which case those price points will be do-able. >> can you weigh in at all? you owned facebook by virtue of the deal it did with instagram in which you were one of the largest institutional holders. >> right. >> i have that correct, right? >> yes. >> can you comment on this change of service thing that has a lot of people up in arms? did instagram make a tremendous mistake? >> well, the main thing i would say is that i think kevin sistern really understands his customer and customer experience and i'm certain he'll get this right and do the right thing. inc. it is something the media has probably blown out of proportion. instagram has reached levels of penetration that are unbelievable and i think the person that put this on their smart phone in topeka yesterday is probably not thinking much about the terms of service. >> this made me just think back

to netflix right when netflix changed its service they alienated a lot of people. once do you that it's hard to get people back. do you fear that we could be talking about the same thing developing with instagram? once you alienate a substantial amount of your clients, don't you have an issue? >> yeah. i don't fear that in this case. >> what is the one social media company that your a he going to be watching in 2013, bill? >> i think from a social media perspective it's got to be facebook. the reach is just so grand. certain companies that have found a way to integrate with the open graph find themselves blown up into higher and higher so it is a platform, it's something all of our companies are looking at how can we integrate, and it's just an extremely important company in the valley. >> does 2013 end with andrew mason running groupon or doing something else? >> i think it is an interesting question. as you know, we've talked about this many times before, i'm not a, you know, huge believer in

what their initial product offering was. i also think it is very difficult for them to -- they want to -- they've been talking about transitioning into local and doing things at a deeper and deeper level. that is just really hard for a marketing company to become like an infrastructure technology provider. i think it's going to be a tough road. they've also, you know, decided to enter the payment space in square and walmart with mcx and visa and google. a lot of people have their eyes on that. i'm not quite sure where they go from there. >> i'm glad you mentioned mobile payments, a space i wanted to talk to you about. what do you foresee developing in 2013? who emerges as the winner? >> i think the big story to watch in 2013 is the mobile payment space. i think there is going to be what i would call a battle royale. this isn't a space that a startup is likely to do well in because it is so choreographed right now. everyone is on high alert. the big companies, you know, are paying a ton of attention and you got pay pal out there. you've got visa out there. you've got square who is pretty

much funded like a public company. you've got this walmart initiative, mcx. everybody's got their big guns out. people are using price discounting as a way to win and it's going to, you know, be a sport of kings. i wouldn't advise any start-ups to weigh in. >> it doesn't necessarily have to be a sport of king singular when talking about an investment. if you're putting money in any of those companies, that are at the forefront of mobile payments, you think that is a winning strategy? >> no. i think the exact opposite could happen. i think that it could be a bit of a race to the bottom. you know, the times that companies have breakout success is when they do something no one expected. it's kind of like entering investing. and right now everyone has so much attention on this that no one is going to sneak up on anybody and like i said, certain companies have decided to start discounting payment processing as a way to break into the market, which once again could be a race to the bottom.

>> just to sort of tie up the whole conversation we are having with the fiscal cliff, you know, a lot of people out in the valley have a lot of money. you speak to a lot of ceos. you're on the board of several publicly traded companies. where would you say that business confidence is in the current environment, the current appetite to invest and spend money? >> yeah. in our universe, you know, 2012 has been a great year. we've had six ipos and 13 m & a events in the past 22 months and if 2013 is like 2012 i'll be thrilled. i do think we live in a bit of a microcosm out here but there's tons of disruption happening with the smart phone, with sass, and as a result, these companies aren't really being affected by the macro trends. >> bill, good to talk to you as always. happy and healthy new year. we'll look for you on the other side. back on halftime. >> you too. take care. >> be well. coming up on the half as the economy teethers on the edge of the fiscal cliff we have the trade you need to make if

washington sends us over. we'll zero in as well on one of the best trades of 2012. can it continue to make shareholders smile in the new year? we'll show you what it is and how to play it. we'll also trade a little mobile payments i think when we come back. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us.

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areas, this stock goes higher. >> joe, mobile payments which gurley says race to the bottom, who is going to emerge on top? >> $100 billion industry this year going to go to $600 billion in a couple years. i think you look at those and allow for the transactions. visa, mastercard, they remain favorable. we also look at ebay which is getting ahead of that nfc technology with the digital wallet. >> veriphone as well on the list. they're all down today but talking about an overall market. >> i don't know if i'd go veriphone. i don't see them as a leader in the mobile space. >> the countdown continues with a stock that soared this year. home depot shares up 45% or there about year to date obviously talking about a down market today so shares may have peeled off just a bit but they are sitting up 45%. what do we do with home depot here? it's a housing quite clearly. housing is turning around. all signs say that it is going to continue to go that way. >> and there will be rebuilding as well, judge, so we've talked about this not being a board up

story like you usually get ahead of hurricanes and so forth, not just a story about people buying generators, a one-time purchase of a generator or whatever. i think this is at least a two quarter story into 2013 for lowe's and home depot. i wouldn't be out of either. if you want the beta or the alpha here you go after something like u.s. gypsum, some of the timber stocks. i think they move faster than these two but these two i think home improvement stocks go higher. >> put the charts back up that we were looking at. it is quite telling, pete, what those stocks have done lately. >> right. extraordinary move. i'm with john. i think you still have upside on these names. lowe's has been doing a great job and playing catch up but us g seems to be plates the place . >> do you have to choose between lowe's and home depot?

>> i think that is the interesting call and of late it's been lowe's that performed better than home depot. >> it's ban big game of catchup. >> is it at the inflection shun point now where the money goes back into home depot? i think conventional wisdom on the street believes that home depot is a better company than lowe's itself. we don't see the evidence to suggest money going back into home depot from lowe's but i think that is the next trade you look for. >> what is your best trade right now assuming we don't get a cliff deal? yahoo finance, senior columnist mike santoli joins us now. you've been saying if we were going to get a deal it could be a sell on the news kind of event. >> yeah. >> we're selling on no news or bad news today. so what does it all mean? >> what it all means is the market was in a position where i think it was going to be in search of an excuse to back off no matter what. just in terms of how extended it had gotten and sentiment getting

a little too comfortable. comfortable with the uptrend as well as a deal before january 1. it was going to be sell on the news it is certainly going to be probably a harder sell on no news that we were expecting. so i think right now the market still probably more than not figuring negotiations are not over. we probably still have a chance. i don't dispute that. i just feel like the market needs to rest and pull back almost no matter what so that is why i feel like this welling up of anxiety you've been pointing out, in the options markets people looking to get hedged might not be just a one day affair. >> i just think most people would think that your view of selling on the news is a bit of an outlier. if we do get closer to an agreement even at the frame work of something i see a headline moving this weekend and you see futures up on sunday night big. don't you think? >> i do think that. i feel like, you know, if the s&p were at 1350 where it was in mid november then, yeah. you rock it higher on a deal. i think once you got to 1440 you

kind of had it baked in more than not. that is the reason. i think now that it's been, all the noise is out there, you know, i was joking that if you got these headlines saying the president is not going to hawaii. he'll be at the table until we get a deal done, fine. then maybe you get one of these pops. i think all of this points out exactly the sorts of things that the market is not particularly good at discounting. because really the outcome is determined by the intentions and the maneuvers of a handful of individuals. it is really not the wisdom of crowds telling you what is going to happen in the market here. >> you've been prescient in your picks for certain. last week on friday you picked johnson controls. 6% gain this week. so congrats on that one. now we're all ears. what is going to move now? >> i would like to just declare victory. >> i'm sure you would. while you're ahead. >> i feel like as a place to hide just in terms of tlt, the sort of long treasury play, simply because if this suspense lasts, it is going to, you know, sort of undo some of the sell off that you saw when we thought everything was great and we had

a deal. so i don't think this is going to be really a fast mover. inherently it is not and i also don't think that betting on treasury yields not to go up in 2013 is a longer term winning trade but i do think that that little move from 155 on the ten-year yield up to 180 can probably have more room to come back if in fact this thing gets messy and continues to frustrate the market. >> just as we were asking almost every day this week about the great rotation, right? if we're going to see the big rotation out of treasuries. >> yeah. >> and into equities and then, you know, cold water. >> here we go. >> yeah. >> look. i think it is going to take actual principal losses on bond portfolios to have that rotation happening in any material way that's felt in terms of a tail wind for stocks but just my view. i don't think people get proactive about those things. >> yeah. mike, thanks so much. happy and healthy. we'll see you on the other side. the yahoo finance's mike santoli. let's trade. you were thinking we were going to get this great rotation.

>> and my belief is that you need something fundamentally to act as a catalyst on the other side of whatever the resolution may be. now there is some evidence that the economy is getting better but i still think it is a bond friendly world and to mike's point the first place you look is the corporate bond. this is a record year in terms of debt issuance. demand is incredibly strong. look at lqd, hyg, those are etfs you could own. >> coming up on halftime as traders make their short-term cliff bets, what should long-term investors do? black rock's michael frederick's $15 billion under management. he is going to share his game plan with you. what is next for research in motion as the stock drops about 16%? it's a brother versus brother showdown. ponytail versus ponytail. the brothers are getting ready.

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we are trans iging. this doesn't happen overnight. we still enjoy strong blackberry 7 sales in many regions. so i think we have a certain period of time, several quarters, where we reposition from blackberry 7 over to blackberry 10. >> well, that was research in

motion's ceo on cnbc earlier today telling investors something they probably didn't want to hear. that the transition will take several quarters. the stock as you probably know by now is sinking. let's get to our first brother versus brother sibling rivalry debate. pete bullish john bearish. >> i have to tell you when you look at the volumes today, huge volume. kind of that flush kind of volume and then you look at the option volume as well. a lot of january upside calls are being bought today. judge, hines talked about the service revenue but he talked about it as transitional. it is not going away. everybody's interpretation is these guys have given up on this whole service. i don't think that is the case. obviously they have to go through with the customers and the enterprise cycle. they're doing very well in the emerging markets and other markets around the world. they're losing in the u.s. but if they can gain and hold on to what they've got with the b baptist churcb 10. >> your brother wearing rosie glasses? >> he is a little rosie. when you talk about blackberry 10 there is a lot of hype.

you know they say buy rumors sell news. this comes out in january. if it is not just a blowout run away hit, then people are going to sell even harder. the trends are weak and the service that pete is talking about, they're changing the way they're going to be getting revenue. so when netflix did that, that stock lost three-quarters of its value. i don't know this one has the same problem from here. but there are definitely some issues out there on the horizon. >> and i would point to the fact that november 20th the stock was under $10. then it was over $14 just last night. and now you're getting this big pullback. i think some of that is priced in right now. when you look at the blackberry 10 and you're talking about the improved functionality of the browser that is something everybody has been wanting. they're demanding. and i think that could be huge. it is a lot of eggs in one basket and why i'm in the options right now not the stock. >> steven weis who made the more compelling argument as we look to close the case on r.i.m. today. >> najarian made the most compelling. >> thank you, steve. >> here's the deal. i had a lot of talk with the

company today. i'm tired of these -- >> where do you have time to do this? didn't you play 18 with temp testimotepper today, have dinner and breakfast with him? >> no, no. look, here is the deal. i'm tired of these apple followers who use the phone just to be cool when it's an inconvenient device. the facts are that market share doesn't mean all that much. u.s. post office has the largest market share almost a hundred percent of daily postage delivery. they're going to lose $5.5 billion this year. porsche, 0.2% of the u.s. market in terms of autos. they're going to make a lot of money this year. the blackberry device is being tested by 120 companies in beta, by 64 fortune 500 companies which the big investment on their part to get i.t. in order. i think it is going to be very good device, it's already the fastest web browser there is. >> yes. >> so i started to buy it back

today. i nibbled on it. i'll wait until it settles down and then buy more. >> can i make this simple? let's just make what steven said and make it simple. john najarian at the beginning -- hold on one second. you got to get off center stage for just a moment. 2012. okay? 2012, john najarian told all of us the best trade was that r.i.m. was going to get taken out. he is now arguing the bear case for r.i.m. do you know what that means? in 2013 r.i.m. is getting taken out. >> that's right. microsoft, baby. >> all right. also want to point out to you guys that senator reid is going to speak at 1:00 likely when he finishes speaking with steven weis probably. >> he is not coming to cut into my air time is he? >> senator reid speaking at 1:00. you'll see that live on power lunch. the latest on the fiscal cliff there. next on "halftime" is the dollar on the verge of a big move as fiscal cliff talks stall in d.c.? our money in motion trade is next. in a few minutes we'll reveal

another top trade of 2012 and whether it can continue to reward shareholders in the new year. we're back in two. let's give thanks - for an idea. a grand idea called america. the idea that if you work hard, if you have a dream, if you work with your neighbors... you can do most anything. this led to other ideas like liberty and rock 'n' roll. to free markets, free enterprise, and free refills. it put a man on the moon and a phone in your pocket. our country's gone through a lot over the centuries and a half. but this idea isn't fragile. when times get tough, it rallies us as one. every day, more people believe in the american idea and when they do, the dream comes true.

we're grateful to be a part of it. ♪ [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now through december 31st. [ santa ] ho, ho, ho! [ male announcer ] lease a 2013 e350 for $579 a month at your local mercedes-benz dealer. [ male announcer ] lease a 2013 e350 for $579 a month you know it can be hard to lbreathe, and how that feels.e, copd includes chronic bronchitis and emphysema. spiriva helps control my copd symptoms by keeping my airways open for 24 hours. plus, it reduces copd flare-ups. spiriva is the only once-daily inhaled copd maintenance treatment that does both.

spiriva handihaler tiotropium bromide inhalation powder does not replace fast-acting inhalers for sudden symptoms. tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. these may worsen with spiriva. discuss all medicines you take, even eye drops. stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain, or problems passing urine. other side effects include dry mouth and constipation. nothing can reverse copd. spiriva helps me breathe better. (blowing sound) ask your doctor about spiriva. coming up on power lunch big news conferences. house minority leader nancy pelosi will hold a news conference at 1:00 p.m. competing with harry reid. we'll carry those live. 1:30 eastern president obama takes center stage as he nominates john kerry to be his next secretary of state and then as the fiscal cliff follies

continue i'll tell you how you can protect your portfolio in what are turning out to be trying times. power lunch at the top of the hour. back to you. >> thanks so much. we'll see you in about 15 minutes. the fiscal cliff stalemate is the driving force behind today's big selloff but what is your best strategy if you're investing for the long run? michael fred ricks has more than $15 billion under management as head of retail asset allocation for black rock's multi asset group. great to see you on the show. welcome to "halftime." >> thanks for having me. >> it is a great day to have you. you told our producer yesterday you've been adding to your risk exposund t get out of core bonds and into stocks. feeling a little shake by about that call? >> this impasse isn't a big surprise to our team. we've been running very low levels of risk in our funds for the better part of the last several months. and took advantage of very low levels of volatility to do things like buy put protection on the s&p for selloffs just like this. so i'm sure that this tap dance

in d.c. will dominate the headlines here over the coming weeks but if anything we're really trying to look out to 2013 and think about the best way to deliver income for our clients and our clients really don't have a lot of tolerance for risk. >> what's the ideal portfolio? what does it look like right now? >> you know, our portfolio is made up of very high quality stocks that pay healthy dividends and have good dividend growth rates. we own investment grade bonds and high yield bonds, preferred stocks, but at the margin we've been putting more money to work in markets where you haven't had this big pursuit of income and those are things like, to give you a few examples, emerging mavgt stocks. we're finding high dividend yielding, very high emerging markets companies where the yields are over 4% and we think dividends will grow at 12 or 13% or asian high yield and investment grade corporate bonds. a difficult market to reach. we have a team in singapore that helps us with that.

but both in the case of emerging markets and asian high yield bonds if you look at the fund flows virtually no money has really moved into those asset classes here over the course of the last year. i think we'll be more creative in where we find income going forward. >> let's bring in one of our traders. >> michael, there is no concern. you mentioned dividend type stocks. no concern looking into 2013 taxation policy changing surrounding that? >> you know, you've seen on some of these names pull back on some of those concerns particularly the companies that a lot of them have had good gains and so with the concern around cap gains you've seen them pull back a little here after the election. we've actually been adding to some of the higher quality names. we've also been selling covered calls around that to generate more income. so specifically on, we have about 15 stocks where we think it's really long term positions, very high quality companies in the u.s. and in the uk. we've sold calls that are 5% to 10% out of the money. when you look at the combination of the options premium and

dividend yield the yields are 9.5%. we like the upside particularly compared to the credit markets where although we still like high yield bonds when you look at the average price in high yield it is hard to see how you can expect a lot of price appreciation going forward. >> michael, one of our traders was pumping his fist in the air as you were saying what your strategy is. so, pete, just tell us why do you think that that option strategy that michael is using is a winning strategy for the person who is watching? >> absolutely. i mean, there's almost no long stock that i own, scott, and to the point i love the fact that you're saying that that is what, one of the ways you're implementing and actually creating that much more yield for yourself because it is exactly right. it's out there and when the opportunities are there on thes on the big explosive moves and you can sell some of that upside against potentially stepping inside of what is a difficult market like today, it adds to your portfolio. and hats off to you. i'm hearing more and more folks come on here talking about how they are manipulating themselves into positions and able to yield

themselves far better or at least get into positions that they never would have been able to get into before. >> michael, got to give you quickly the last word. follow up on that, if you would. >> appreciate the comments, pete. you know, it is getting more and more challenging to find income. i think high yield is a fair place to be. we think the default rates. ing really low. you look at the average price across bank loans and preferred stock and high yield and it is hard to see how you get a coupon. you are getting the upside and very competitive levels of yield. i don't know where else you will find that. >> michael, enjoy the conversation so much. thanks for coming on. >> thank you. >> see you on the other side of the new year. >> how are they reading the latest developments in fiscal cliff talks? let's bring in boris. let's be quick. where is the man going with the stalemate in d.c.? >> right now it is going down if

you put the wrong decimal point on dow, it looks like the euro trade. the fiscal cliff does get resolved. the euro has been very strong against the british pound. and i like that cross a lot. it has been holding up. the long euro pound with a stop at 81, could be a good trade for next year if you believe we go back the fiscal cliff and europeans recover. because the pound has been getting tremendous amount of benefit as safe harbor trade. now that risk of fracture on the eurozone has passed, the european economy rebounds and the economy is very lackluster. i think that's a good trade going into the first quarter of the year. >> boris, thank you so much. see you on the other side as well. don't forget to catch "money in motion" at 5:30 on cnbc. it had america falling in love this year but will it break

up in the new year? another top 20 trade is up next. [ male announcer ] this is amy. amy likes to invest in the market. she also likes to ride her bike. she knows the potential for making or losing money can pop up anytime. that's why she trades with the leader in mobile trading. so she's always ready to take action, no matter how wily... or weird... or wonderfully the market's behaving...

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superderivatives introduces dgx. data done differently. we continue our countdown of the best trades of 2012. the most valuable on earth this year. hmmm, what's that? no more talked about more than that one right there, apple. $705 back in september.

it's been much talked about over the last couple of weeks too. what's this one going to do next year? >> thankfully we haven't been talking about it a lot. i think it is one of the names that you continue to own. you can trade around. it's become a little bit of a casino the last few weeks. i talked about that. if it is going to be a casino, you trade along with it, but it is a core holding. >> doc? >> i like it through 2013. >> pete? >> i like the fundamentals but i think the tax holding the way it is, wait until january to buy it. >> wait until they report january 22 opinion i think you can wait until then. >> you just wait to see what they report. >> yeah. it'll be up and down. why go through the aggravation. >> final trades next on "halftime." [ male announcer ] when gloria and her financial advisor made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors.

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can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery. it is time now for final trades. joey t you are up first. >> i like what